Orbitz.com has launched the “Hotel Fee Cut” promotion, cutting booking fees on all of its hotels around the world for rooms booked by July 15.

Published: 23 Apr 2009

Orbitz.com has launched the “Hotel Fee Cut” promotion, cutting booking fees on all of its hotels around the world for rooms booked by July 15.

The introduction of hotel Total Price and the hotel booking fee cut promotion comes on the heels of the recent launch of the Orbitz “Biggest Hotel Sale Ever”, featuring discounts of 30 percent or more at thousands of properties worldwide through May 31.

Analysis by Hudson Crossing

According to strategic advisory firm Hudson Crossing, Orbitz has fired off the latest salvo in the continuing war between the OTAs by removing the somewhat hidden booking fees that have pervaded the industry’s merchant model. These booking fees have typically been included in the “second step” of the booking process after the consumer clicks on the rate at the hotel they wish to purchase. The fees have been bundled together with taxes in a single “taxes and fees” line without delineation to the consumer on which portion was/is taxes going to the government and which portion is fees going to the OTA.

The firm sampled a room for Wednesday at the Hilton New York to see how the big OTAs and Hilton.com compared. The findings are as follows:

It stated: As expected, every site we tested came back with the same initial price: $219. However, from there, prices diverged widely when the “all-in” price was compared:

Hilton.com $253.71
Orbitz.com $253.10
Priceline.com $253.76
Travelocity.com $262.46
Expedia.com $287.83
Hotels.com $287.83

Remember, these are the fully-loaded prices off the same $219 base room rate. Quite a difference indeed. Obviously, Travelocity, Exedia and Hotels.com are adding some significant revenues under the guise of “taxes and fees” - often more fees than taxes!

Orbitz is clearly looking to strike Expedia and Travelocity where it hurts in their most profitable segment - hotels. The question is, will consumers notice? After all, all of the OTAs have had these “hidden” fees for years - with few complaints from consumers. All of the competition has been on the first page - ensuring that the first rate consumers see for a hotel is competitive.

And this is yet another “temporary” promotion - only for bookings made between now and July 15th. Will it last longer? Priceline's Fee Chop certainly has.

And there is still that little cancellation fee that Orbitz dings consumers for. Priceline and even Hotels.com have long removed the $25 cancellation fee they imposed above any fees the hotel itself might have charged. The $25 cancel fee lives on at Orbitz, Travelocity and Expedia. Will this be the next frontier in the race to be the most “consumer friendly OTA?”